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2018 (11) TMI 1018 - AT - Central Excise100% EOU - levy of excise duty - clearance of Plastic used packing material wherein they received input - Held that - Identical issue decided in the case of M/S NOVODIGM LTD RUBAMIN LABORATORIES LTD VERSUS C.C.E. & S.T. VADODARA-I 2018 (8) TMI 355 - CESTAT AHMEDABAD where it was held that as per the nature of the packing material there is no doubt that the said plastic drums are durable and re-useable therefore the clearance of such empty drum liable for payment of duty as per N/N. 22/2003-CE dated 31.03.2003 and 52/2003-CUS dated 31.03.2003 - demand upheld - appeal dismissed - decided against assessee.
Issues Involved: Whether the appellant, a 100% EOU, is required to pay excise duty on the clearance of plastic used packing material where they received input.
Analysis: Issue 1: Duty on Clearance of Empty Drums of Inputs The appellant argued that duty is only required to be paid if the empty drums are durable and re-usable. They contended that the plastic drums, once used, are sold in the market for household purposes and not repeatedly used, thus not meeting the condition for duty levy. The issue revolved around the interpretation of the notification, with no suppression of facts or malicious intent on the appellant's part. However, the Revenue argued that the plastic drums were durable and re-usable, as they were used repeatedly. The Tribunal referred to previous cases and held that the plastic drums were indeed durable and re-usable, making them liable for duty payment under the relevant notifications. Issue 2: Judicial Precedents The Tribunal cited previous cases like M/s Sanmar Speciality Chemicals Ltd and Commissioner of Customs, Bangalore v. Suretex Prophylactics (I) Limited to support its decision. In these cases, similar issues regarding the liability to pay duty on empty containers suitable for repeated use were considered. The Tribunal found that the containers in question were suitable for repeated use, aligning with the provisions of the relevant notifications. The Tribunal rejected the appellant's argument that the barrels were not capable of further use, as no evidence was presented to support this claim. Issue 3: Penalty Imposition Regarding the penalty imposed under Section 11AC of the Central Excise Act, 1944, the Tribunal noted that the demand was raised within the normal period and the issue primarily involved the interpretation of the law. As there was no malafide intention on the part of the appellant, the penalty was set aside. The Tribunal partially allowed the appeals based on these considerations. Conclusion: The Tribunal upheld the impugned order and dismissed the appeal, as the issue had been settled in favor of the Revenue based on previous judgments. The duty on the clearance of the plastic used packing material by the appellant, a 100% EOU, was deemed payable as per the relevant notifications. The penalty under Section 11AC was waived due to the nature of the issue being primarily a matter of legal interpretation. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on legal interpretations and precedents.
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